This article is part two of a two-part series sharing local area marketing “best practices” from our franchise systems and corporate clients across the globe. As a reminder, part one focused on Referrals and Social Networking. This article will focus on Paid Advertising, Database Marketing and Networking.
Paid Advertising
There are many options to choose from including:ADVO,Val Pak, Money Mailer, Shoppers, Shop Wise, Yellow Pages ads, Yellow Pages, Newspaper ads/inserts, Magazine ads/inserts, Radio/Cable TV advertising, Wrapped vehicles, Billboards, etc.
Selecting the paid advertising medium isn’t the only area of focus. You also have to ask yourself, “What should I say? How often should I say it?” The Direct Marketing Association (DMA) indicates it takes seven to nine “touches” for someone to hear your message. Not buy…just hear your message!
Here are five important questions to ask yourself when evaluating the money you dedicate towards paid advertising:
• How much money (or what percent of revenue) did you dedicate towards marketing this past year? • How do you know if it was money “well spent?” Did you increase revenue, average order/ticket size, store traffic, etc.? • How did you decide which medium gets how much? • How did you track the results? • What will you do differently (if anything) this year?
Database Marketing
Historically direct mail campaigns enjoy less than a 2% response rate but that percentage can increase dramatically if you target the right audience, with the right message, containing the right offer at the right time through the right medium.
In addition to your customer database make sure that you have an active prospect database containing those prospects currently in your sales pipeline; friends and family members that aren’t customers; trade, home or industry show suspects as well as other businesses or geographic areas that meet your marketing profile. Research shows that 70% of the success of any marketing campaign is due to the quality of the database. Not the offer, not the creative nor the medium but rather the database! So make sure that you profile your best clients, market to them on a frequent basis and find others that look like them. Companies can purchase (or rent) qualified leads from various sources, including information services companies (such as Dun & Bradstreet, Experian, Equifax, InfoUSA, Trans Union, etc.), trade associations, professional organizations, alumni associations or list brokers or compilers. These prospect lists enable you tailor your marketing efforts to different customer segments. For instance, you can select highly qualified leads to receive discounted offers or target your offering to appeal to specific age groups or sizes of business.
In addition the business section of local papers and regional business journals are usually filled with prospects that need your products or services. For example if you sell office equipment, keep an eye out for new companies that are moving into your territory or for companies in your territory that have announced expansion plans. Proactively marketing to those companies will put you in a favorable position. Also, look at the names of the people who were recently promoted or who received awards. A hand written note with a copy of their article is a great “ice breaker!”
Once the databases are assembled maintain communications on a regular basis. Reach out to your customer database a minimum of four times a year. Call them, drop by, take them to lunch, etc. Make sure you use technology (i.e., email, social networking, etc.) to proactively manage your customer contacts. Networking Another local area marketing option is to join local, regional or national networking groups such as Business Networking International (BNI). The sole purpose of networking groups is to enable people to share leads with member businesses that don't directly compete with theirs.
So where should someone network? Here’s a list to get you started: • Chambers of Commerce • Industry associations • Professional organizations • Business/Personal referrals: • Friends/Neighbors • Existing/Former customers • Existing/Former associates • Existing/Former suppliers • Former competitors • Networking groups such as Business Networking International (BNI) • Social Networking sites like Facebook, Twitter, LinkedIn or Plaxo
The best networkers leverage their connectors and influencers list. These are the people that already know who you want to know and sell to. Let’s say your system sells window treatments. Connectors would include real estate agents, builders, contractors, flooring companies, installers, painters, carpenters, hair dressers, etc. Research shows that the average person knows 250 people. While your mileage may vary that means that every time you meet someone new your sphere of influence can expand by a multiplier of 250!
I urge you to implement one or two local area marketing tips from this article to ensure success. Take actions in 2010 that you haven’t done (or weren’t willing to do) in past years. In summary…target prospects that will appreciate and utilize your products and services. Reconnect with satisfied customers to get warm referrals…then offer those customers a discount on their next purchase. Use social media to promote your referral program and stay connected with your clients and prospects. Make sure that you profile your best clients and market to them on a frequent basis. Take advantage of the many face-to-face opportunities at local networking events with connectors and influencers in your area.
Sales Tip: "Local Area Marketing Tools…Which Works Best?"
“My sales numbers stink and my average ticket is shrinking so now cash flow has become a huge problem! My best customers are spending less and buying less often.” Does this sound familiar? I have heard similar comments over and over from senior executives in a variety of industries.
This article is part-one of a two-part series sharing local area marketing “best practices” from our franchise systems and corporate clients across the globe. While not all of the “best practices” may be applicable to your business model I’m sure that you’ll find two or three nuggets that can positively impact your business. I truly believe that local area marketing is one of the keys to driving same store sales and increasing customer counts for 2010.
Referrals
By far and away the least expensive and easiest local area marketing option is to ask for and receive referrals on a regular basis. The majority of businesses in the United States make the majority of their revenue by up-selling or cross-selling existing customers. Business development becomes much easier if we ask for and are given referrals on a regular basis.
Here are some “facts” about customer retention and referrals: • Studies have proven that a mere 5% increase in customer retention can result in profit increases of 20 to 80% for most businesses • Repeat customers spend an average of 67% more than new customers • After a customer purchases from the same supplier more than twice they’re 50% more likely to provide referrals • The close rate on referrals is often three to five times better than the close rate on cold calling
The first step in generating referrals is to learn to ask for them. Let your customers know you're interested in receiving referrals and what you're looking for. Another step is to give referrals to get referrals. There is nothing quite like leading by example. Demonstrate how to refer by providing your friends, customers, and business partners with a stream of helpful and useful referrals. A third step to generating referrals is by asking for letters of recommendation. Here are some tips to help you get those letters. • When you sign the initial contract or order with a new prospect let them know that you’ll be asking them for a letter of recommendation within the next 60-days based upon their experiences with you, your company and/or your products or service. This will give them confidence in the service you will be providing and at the same time set an expectation of them. • Always ask a person whose recommendation will be respected. For instance key clients, industry leaders, “thought” leaders, big “name” companies in your area or industry or other persons whose judgment the reader will value. • Since some clients might write a weak letter of recommendation you could ask them if it would be helpful to send some samples of other letters that they could use as a template. Sending samples of other letters serves two purposes. First, it gives you a tremendous amount of credibility. Second it ensures that you’ll probably receive a well written letter that includes key performance indicators. • Always thank the person who allowed you to use their name. Your thank-you letter not only shows your appreciation, but it also opens the door for you to ask for assistance again in the future, should you need it. Always give status updates to the people that provide you referrals! Whether the person they referred purchased from you or not you need to let them know that you valued their referral enough to keep them in-the-loop. Social Media
The first rule of social networking is to use it on a regular basis! Companies large and small use social media to communicate with and market to customers. Here’s a good example connecting through social media. A pizza chain offers promotions through a variety of mobile messaging options. They send a quick message (e.g., Don’t feel like cooking tonight?) at 4 PM with a code for someone to receive a discount at one of their stores. Another example is from a window covering company has created a Facebook page showing before and after pictures of work they’ve done for homes and businesses in their territory. Their Facebook page has worked so well that they were able to significantly reduce the money they spent on print advertising (i.e., brochures, collateral, etc.) in the past.
Social media helps extend your brand. Getting people to blog, post or tweet about your company is a great way to generate interest and curiosity. Companies like Dell, Starbucks, Papa John’s, Ford and Oreck have seen tremendous lifts in performance for relatively small spends in marketing dollars not to mention the fact that their customers feel more connected to their Brand.
Social media also helps companies keep their finger on the pulse of their customers and markets by reading what people have to say on blogs, posts and tweets. By collecting this data companies are able to manage perceptions in the market place and even test new messaging, pricing and product offerings in “real time.”
Franchise system executives need to blog. Some business owners believe that it’s too difficult or that it’s too technical but that’s not true. Existing blogger sites (Blogger.com, Goingon.com or WorPress.com) offer customized templates to get you started. You can blog about your company’s history, new product launches, new employees, awards, etc. The list of topics to blog about is endless!
If your Franchise System sells in the B2B (business to business) space it’s critical that you use LinkedIn (www.linkedin.com). I believe that LinkedIn is the best B2B social networking site. Here’s a quick overview: • LinkedIn is geared towards the working professional and allows their users (over 50 million worldwide) to create a profile. • LinkedIn users can recommend one another, join groups, make introductions as well as post and apply for jobs. • In addition, it’s a great tool to identify and connect with prospects, dormant clients, former associates and potential partners. • LinkedIn is great for doing research on companies, organizations and industries as well as to build a “buzz” about your organization.
So how can someone use LinkedIn to generate referrals and new business opportunities? By adding connections you will increase the likelihood that people will see your profile when they’re searching for someone to do business with. People would much rather work with people who their friends/colleagues know and trust! When someone accepts your invitation, immediately go to their connections and see if they are connected with anyone you want to know or do business with and then ask for a “warm” introduction.
In closing …there’s an opportunity for you to increase your sales, average ticket and build brand awareness through referrals and social media. You’ll need to train yourself to ask for referrals and you’ll need to learn new software for the social media of your choice. However, the time invested will pay huge dividends going forward!
The second part of this series will appear in our next newsletter and will focus on Paid Advertising, Database Marketing and Networking.
Spotlighting a Top Performer Here is an excerpt from a recent email from Owen Littlewood, a FASTSIGNS Franchisee, based in Virginia Beach, Virginia: I would like to thank you for your valuable sales coaching on how to solicit appointments and get targeted potential buyers to listen to what I have to say. I feel I have received great value for the money and will be booking more one-on-one sales coaching come the New Year. The tools you have introduced are well thought through and yet so simple to follow. The e-mail templates have proven invaluable as well. Just to let you know I‘ve already won three bid jobs in December and had sales of over $30,000 in just seven days which is unbelievable! Owen, congratulations on your success and keep up the great work!
Sales Tip: "Retain your Customers to Grow your Business"
The goal of any business is to create loyal customers who want to buy their products or use their services on a consistent basis. In other words “get them” and “keep them!” Retaining customers requires that the customer is satisfied with the level of service provided, the quality of the product and the service experience in general. The purpose of this article is to share with you some “best practices” from other successful Franchise Systems to help you improve your customer satisfaction which leads to increased customer retention and ultimately improved profitability and cash flow!
Our research shows that even small improvements in customer retention can produce sizable benefits…which is why the most effective Franchise Owners always focus on retaining the customers they have. It's been estimated that a mere 5% increase in customer retention can have a 20 to 80% lift in profitability!
Let’s start with a few universal truths about keeping customers:
• It costs a lot less to keep an existing customer than it costs to acquire a new customer. • According to the Harvard Business Review the cost to replace lost customers can be six to seven times more expensive than winning their business in the first place • It can take 18 to 24 months before a customer becomes profitable. • Given marketing costs, sales costs, training costs and ramp up time most Franchise Owners need a minimum of 18 months of purchases and/or revenue to “break even.” • Customer retention is very different than renewal dollars. Renewal dollars focuses only same store sales while customer retention focuses on the number of retained/repeat customers. One big mistake Franchise Owners make is that they only track (and in most cases compensate their salespeople on) customer renewal rates versus including customer retention rates into the formula. When your company does a good job on retention it is easier to cross-sell and up-sell existing customers (versus selling new ones) which lowers your cost of sale and at the same time grows your revenue stream.
As we all know customer service is a huge driver in customer satisfaction and customer retention. So, with apologies to David Letterman please let me highlight ten of the most common customer service mistakes:
1. Having an untrained staff 2. Trying to win the argument 3. Not being accessible to your customer 4. Defaulting to your “policy” 5. Not living up to your promises 6. Not remembering your customer’s name 7. Giving customers the runaround 8. Not listening to your customer 9. Forgetting to say "please" and "thank you" 10. Failure to manage expectations
After reviewing this list I encourage to ask yourself how many of these customer service mistakes have your employees made in the past three months?
So what can be done about it? Here is a list of seven secrets to keeping customers:
1. Know your customers: What makes them unique? What products/services do they buy? How often do they buy? Who else do they buy from?
2. Deliver flawless results: To establish long-term customer relationships it is critical that you flawlessly deliver every benefit and value you promise. That is the key to a customers respect, trust and loyalty.
3. Develop a proactive plan: Understanding your customers and doing first-rate work are essential for creating a loyal clientele. But there's more. You must also develop a proactive, customer-specific plan that articulates how you will retain and grow your customer base. Without a plan, you'll drift from project to project, relying mostly on luck.
4. Uncover “needs:” To retain customers, you must focus on customer satisfaction. Rather than just making a sale and then moving on to the next customer, savvy sales people are turning themselves into "account managers" rather than just salespeople.
5. Manage expectations: You need to manage expectations. This means from both a positive (proactive communication) and negative perspective. Let me give you an example. Customers with unrealistic expectations of what they want and/or what you can deliver will never be satisfied. They'll just waste your time and then ultimately take their business elsewhere.
6. Keep your name in front of your customer: Maintain communications. Reach out to the customer four times a year at a minimum. Call them, drop by, take them to lunch, etc. Make sure you use technology (i.e., email, social networking, etc.) to proactively manage your customer contacts.
7. Assume nothing: No matter how good you are, never assume you've got a loyal client. Complacency is the enemy of loyalty. A client's trust and loyalty can be swept away if a salesperson gets cocky or lets performance slip, even on just one interaction.
If Franchise Owners can get their employees focused on delivering customer service excellence their customer satisfaction and customer retention numbers will go through the roof! In addition satisfied customers buy more, buy more often and tell others which means a significant increase in referral business.
Management Tip: Avoid the Five Fatal Flaws of Management
The success of any Franchise Owner is tied directly to their ability to hire, train, motivate and retain good employees. The focus of this article is point out the five fatal flaws of management and more importantly how to avoid them!
Fatal Flaw #1: Unclear and Inconsistent Communication
Our research shows that ninety percent of management problems are “people” problems and ninety percent of “people” problems are communication problems. While your mileage may vary if these statistics are roughly right communication is the key to increased productivity and effectiveness!
We have found that the biggest stumbling block to good communication is poor listening skills! So what can be done to improve ones listening skills? Here are five keys to becoming a better listener:
1. Eliminate distractions • Turn off computer, Blackberry, TREO, iPhone, etc. 2. Get rid of excess paperwork at your desk 3. Know your blind spots…assumptions and prejudices 4. Be an active listener…paraphrase, ask questions 5. Be an empathic listener…listen to the way the message is being said
Once you’ve improved your listening skills here are five keys to delivering a better message:
• Know your objective • Are you trying to inform, direct, educate, extract information, etc.? • Be clear, specific and concise • State your point in 25 words or less (when possible) • Tailor your message to your audience • Check for understanding • Watch your body language
Fatal Flaw #2: Failure to Acknowledge/Manage Change
The belief of “status quo” or “standing still” is a serious and dangerous delusion in today’s economic times. Businesses are either moving forward or falling behind because they certainly aren’t standing still! Even if you don’t actually see the changes on a daily basis, it does not mean that they are not happening. So, why do some Franchise Owners try to ignore change? Our research shows that there are four reasons why many managers ignore change:
1. Emotion (fear of the unknown, anger, uncertainty, mistrust) 2. Perception (they do not see the need for the change) 3. Attitude (they believe that most changes are not for the better) 4. Reluctance (they adopt a wait and see attitude)
Remember, your team will sense and react to change whether the Owner and/or Manager chooses to accept it or ignore it. So how does one communicate change? One method to successfully communicate change is to utilize our Change Message Model:
1. State the change…Be clear, concise, truthful 2. Payoffs…Why the change? 3. Support…How are we going to get there? 4. Optimism…Be positive about the future and how this change will make their job more productive/secure
Fatal Flaw #3: Failing to Manage Team Members Differently
Members of your staff each require a different level of care and attention so it’s imperative that you adjust your management, coaching and mentoring skills to each individual person on your team. So how does one go about learning the uniqueness of each team member? One handy way to begin the development coaching process with your new team members (and all existing members for that matter) is to take a “Snap Shot.” SNAP is an acronym for:
Strengths: What does your team member do well? What do they most enjoy doing?
New Objectives: What are their short and long term goals? What do they want to accomplish this year?
Assistance: How can you help them get there? What resources are required?
Professional Development: What skills would they like to improve or learn this year? What are the best ways for them to learn?
Fatal Flaw #4: Failure to Establish Clear Goals/Expectations
• Make sure all tasks are clear and understood • At the beginning of each year, establish each individual’s performance appraisal criteria • Establish a contract with difficult employees to ensure success • Create smaller and achievable incremental goals that are measured on a monthly and quarterly basis • Provide variety in the scope of work • Form a sponsor or mentor program • Create individual development plans • Establish a quarterly review process for your team
Fatal Flaw #5: Poor Time Management
1. Know what you want from your time • The proven way to do it is to set goals and to set SMART (Specific, Measurable, Attainable, Rewarding, and Timely) goals 2. Learn the difference between urgent and important 3. Know and respect your priorities • Plan your actions for achieving your goals 4. Know how you spend your time • Analyze time wasters
So how do you avoid the Five Fatal Flaws of Management? Lead your team with effective communication, embracing change, knowing your employees as people, establishing clear goals/expectations and efficient time management. Incorporate these skills into your day-to-day management style and you’ll lead by example! Sales people see right through the “Do as I say - not as I do” type of management and they don’t respect it either. Show them that you mean business and will help them achieve their personal and professional goals so they can reap the benefits of reaching their full potential.
Sales Tip: “Plan your Day…Work your Plan”
The key to time management is to realize that you cannot possibly do everything that there is to do in a day. Salespeople have to consciously decide what they are going to do with the limited amount of time that that they have at their disposal. Time management helps salespeople:
• Reduce wasted time so they'll be more productive each day • Accomplish more with less effort • Reduce stress and anxiety • Focus their time and energy on what is most important • Achieve short-term and long-term goals
Everyone has 24 hours each day and 168 hours each week to eat, sleep, work, relax, exercise and interact with others. There is nothing magical about getting the most from these hours…it takes planning and implementation. Time management does require self-discipline and control until the behavioral changes are internalized and that new behaviors become an everyday habit. Day Timers, Franklin Planners, Blackberry’s, TREO’s, iPhones and other tools for managing time are useless if one does not utilize them effectively.
Let me start with dispelling a couple of time management myths:
• Reduce wasted time so they'll be more productive each day • Accomplish more with less effort • Reduce stress and anxiety • Focus their time and energy on what is most important • Achieve short-term and long-term goalsPlanning my time just takes more time. • Actually, research shows just the opposite. • The busier I am, the better I'm using my time. • If you believe this to be true you may be doing what's urgent…not what's important.
Before someone can effectively manage their time they need to know how they spend their time in the first place. Here’s a great exercise: 1. Write down all the activities in a normal work week • For instance appointments, meetings, generating proposals, making/taking phone calls, reading/sending emails, administrative requirements, etc. 2. Group “like” activities together • For instance sending follow-up letters/emails and documenting customer visits could be grouped under administrative activities 3. Assign a percentage of time spent on each activity • Remember…it can’t add up to more than 100% 4. Pie graph the results 5. Ask yourself…”If my distribution of time does not change will I be able to achieve my personal and professional goals?”
Compare the record of what you have accomplished to what you planned complete in that week. This difference will be a real eye opener! It will reveal how much you are letting situations, events and other people control your time instead of you being in command of your schedule.
Improving your time management habits takes a concerted effort. One of the best ways to begin is to set SMART (Specific, Measurable, Attainable, Rewarding, and Timely) goals. A good example of a SMART goal for anyone in sales is as follows: “I will increase the number of qualified prospects in my pipeline by 20% within the next 90-days.”
In closing, please allow me to share with you five “tried and true” time saving tips we’ve collected from salespeople and sales leaders from all over the globe:
1. Ask yourself throughout the day: "Is this what I want or need to be doing right now?" • If yes, then keep doing it. • If not, stop the activity. 2. At the end of each day create a "to-do" list for the following day. Mark items as "A" and "B" in priority. • Set aside two hours each morning to do the important "A" items and then do the "B" items in the afternoon. • Let your voice mail take your calls during your "A" time. 3. Empower your co-workers/subordinates to help pick up the slack. 4. Concentrate on doing only one task or activity at a time. 5. Maintain accurate calendars and abide by them. 6. Be serious about prospecting. Block out a minimum of one-hour per day for prospecting or business development activities. If it’s on your schedule it should be in your Blackberry, iPhone or TREO with the rest of you appointments.
The bottom line is this . . . if you don’t stop doing nonproductive activities you’ll never have time to start doing more productive activities! We all know that the definition of insanity is doing the same thing over and over again and expecting different results. Take control of the activities that you do on a regular basis and get control of your time!
Utilize the tips in this article to help you become a salesperson that takes control of your personal and professional life and make time work for you! Management Tip: “Plan for the Success of your Business”
Management Tip: “Plan for the Success of your Business”
Successful Franchise Owners are not "fly by the seat of their pants" entrepreneurs but rather people that employ a sound planning process that details their business plan, avoids mistakes and minimizes risk. That planning process should be detailed in a comprehensive business plan that clearly defines their business, identifies their goals (both short-term and long-term) and serves as their company's roadmap for success.
A business plan also helps Franchise Owners hire the appropriate people at the right time, schedule capital expenditures, manage cash flow and handle unforeseen complications. It provides specific and organized information about their company, their capital requirements, their operational needs and how they will market their products and/or services. The business plan is the repository of all proprietary information (financial, operational, etc.) about their business.
Despite the critical importance of a business plan many Franchise Owners drag their feet when it comes to updating the document they created for their Franchisor, their banker or their investors when they decided to purchase their franchise in the first place. They often argue that their marketplace changes too fast for a business plan to be useful or that they just don't have enough time. You wouldn’t expect a builder to start construction without a blueprint so it makes sense that Franchise Owners shouldn’t rush to market without a detailed plan for their success!
Before an Owner begins writing (or updating) their business plan it is important that they answer the following four core questions to give them “top-of-mind-awareness” about their business:
1. What service or product does your business provide and what needs does it fill? 2. Who are the potential customers for your product or service and why will they purchase it from you? 3. How will you reach your potential customers? 4. Where will you get the financial resources to run your business?
So what goes in a business plan? The body of the plan can be divided into four distinct sections:
1. Description of the business (i.e., what does your business do, what makes it unique, what products or services does it offer, etc.?) 2. Marketing (i.e., who is your target audience, who are your competitors, how will you go to market, etc.?) 3. Finances (i.e., what are your income projections, what are your projected costs, what are your cash flow requirements, etc.?) 4. Management (i.e., who are the key players in your organization, what are their roles and responsibilities, what are their experiences, etc.?)
After completing the business plan the next step is to utilize it as a “business tool.”
As a communication tool, it is used to attract investment capital, secure loans, convince people to join your organization as employees, assist in attracting strategic business partners and to attract customers. The development of a comprehensive business plan shows whether or not a business has the potential to make a profit. It requires a realistic look at almost every phase of business and allows you to show that you have worked out all the problems and decided on potential alternatives to ensure the success of your business.
As a planning tool, the business plan establishes goals and milestones to help guide you through the various phases of your business. A well-developed plan will help identify roadblocks and obstacles so that you can avoid them and establish alternatives. Many business owners share their business plans with their employees to foster confidence in their future with this business.
As a management tool, the business plan helps you track, monitor and evaluate your progress. The business plan is a working document that you will modify as you gain knowledge and experience. By using your business plan to establish timelines and milestones, you can gage your progress and compare your projections to actual accomplishments.
Use the following five steps to grow your business:
1. Know your numbers…Before you create, amend or update your business plan take a hard look at your numbers. Specifically look at revenue growth, cash flow and margin performance but more importantly look at profitability the more successful Franchise Owners I know establish sales metrics and sales management key performance indicators (KPIS) to check the pulse of their business on a weekly, monthly and quarterly basis.
2. Track your competitors…Be aware of who your competitors are and how they position themselves in the market place. Constantly evaluate your competition and your competitive differentiation.
3. Staff up for growth…Adding staff increases overhead but being understaffed might keep your business from growing at all. For instance if you’re considering adding an Outside Sales Rep ask yourself, “How much revenue does this person have to generate to pay for themselves?”
4. Retain your current clients…It can cost up to ten times more to “win” a new client than it does to maintain an existing client. If you are able to keep an additional five percent of your client base year-over-year you can actually double your bottom-line profits!
5. Stash some cash…Building a cash supply is not novel advice but it’s often forgotten until it’s too late. No amount of planning can prevent a recession or natural disaster but keeping as little as 30-days worth of cash on hand can be the difference between a Franchise Owner making it or going out of business. The newer a business is (e.g., less than two years old) and the more seasonal the business is, the more cash (or access to capital) you need.
The most successful Franchise Owners review their business plan on a quarterly basis and update their plan throughout the year based upon changing market conditions. Remember, once your plan is completed the key to your success becomes the careful execution of your plan!
Sales Tip : “Selling in a Tough Economy"
Let’s take a quick look at the last eight to twelve months…Mortgage Meltdown, Credit Crisis, Stock Market Loses more than 50% of its Value, Bank Closures, Government Bailouts, Layoffs, Downsizing, Home Foreclosures, Cost of Living Continues to Rise, Cash Flow Issues and a Shrinking Discretionary Dollar. How’s that for a morbid start to a newsletter!
So how do these market place changes affect Franchisees? Customer counts are down, close rates are worsening, sales cycles are getting longer, margins are shrinking, there is less money available to spend on advertising, marketing and promotion, we’re losing customers and the customers we’re keeping are spending less!
We are living in uncertain economic times to say the least! That being said, what can Franchisees do to ensure success? Here are three “tried and true” tips to help you drive same store sales:
1. Profile Your “Best” Customers and then Target Similar Prospects: The most successful Franchisees profile their existing customer base to determine specific characteristics of their “best” customers (i.e., SIC code, annual revenue, number of employees, locations, etc.). In addition, they need to identify what title (or titles) they had to convince to buy, what business problem/problems they were able to help solve and what their quantifiable value proposition was.
Imagine if you found out that your best customers are VP’s of Marketing, for manufacturers of consumer packaged goods products, with revenues of $50 million dollars or more, employing a minimum of 100 people, with offices located throughout the southeastern past of the United States. Wouldn’t it be quite easy to find other manufacturers that “fit” that profile? B2B database companies such as infoUSA, Dun and Bradstreet, Experian would be delighted to sell you “names” that match your profile.
2. Always ask for Referrals: Now more than ever it is imperative to ask for referrals! Every time someone closes a sale they should ask for a referral. Every time that they’re turned down for a sale they should ask for a referral. Every time that they satisfactorily resolve a customer problem or complaint they should ask for a referral.
It’s also very beneficial to join local or regional networking groups. The sole purpose of networking groups is to enable salespeople to share leads with member businesses that don't directly compete with theirs. Other networking opportunities include joining a local Chamber of Commerce, joining a trade association, volunteering to participate in a charity or local function, etc.
Lastly, I suggest that Franchise Owners and their salespeople leverage their connectors and influencers. Research shows that the average person knows 250 people. That means that every time you meet someone new your sphere of influence can expand by a multiplier of 250!
3. Schedule Time for Prospecting Every Day: Everyone in sales should schedule a minimum of one-hour per day dedicated to prospecting or new business development activities. That time can be spent generating referrals, attending a trade show, attending chamber events or business mixers, by joining a local networking group or by scouring the business section of their local newspaper or business journal.
It is imperative that Franchise Owners and their salespeople actually schedule the time in their calendar or other “things” will surely come up! It’s also important to track your results on a weekly basis to ensure that you’re on target. At the end of each week ask yourself the following questions:
• How much time did I spend prospecting this? • How many appointments did I have? • How many new opportunities did I uncover? • How much business did I sel • Where am I month-to-date relative to goal?
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